David Goulart NextStep Properties, Inc. 155 George Washington Blvd. Suite 110 Hull-Nantasket Beach, MA 02045 Office: 781-925-1245 Fax: 617-765-4699 Cell: 617-272-5774

Buyer's Resources

Buying a home is the largest purchase most people will ever make. Homeownership has great benefits. Homeownership also comes with certain responsibilities.

Are you ready for homeownership? Look at your current situation and determine if:

• You have a continuing and reliable source of income prior to applying for the loan.
• You have a credit history that shows you're ready for homeownership.
• Your total debt is manageable and you can afford to take on the costs associated with homeownership.
• You have money saved for a down payment and closing costs.

Once you fully understand your current situation, it's important to look at the pros and cons of homeownership to make the best decision for you and your family.

Benefits of Home Ownership

Homeownership has many advantages - both financial and personal. But buying a home is an important decision. Look at the benefits and the differences between homeownership and renting to better understand if owning a home is right for you.

What are the benefits of homeownership?

• Tax savings.
  You may earn significant tax savings because you can deduct mortgage interest and property taxes from your federal income tax and many states' income tax if you itemize your deductions.
• A more stable monthly housing expense.
  Your monthly housing loan or mortgage expense can remain the same for the life of your mortgage, depending on the type of loan you choose.
• Equity.
  You may build equity in your home over the life of your loan, which allows you to plan for future goals like your child's education or your retirement.

Homeownership is not right for everyone. It may not be the right time in your life or you may not like the commitment associated with owning a home. Here are some differences between renting and homeownership:

• Renters are typically free from maintenance obligations such as repairs or lawn care.
• Homeowners often have more freedom in decorating, landscaping, etc.
• Renters can move more easily and more quickly than homeowners and there are higher costs associated with buying and selling a home.
• Homeowners have a financial investment and may build equity in their home.

How Much Can You Afford?

To get a quick idea of what you can afford to spend, multiply your annual gross income (before taxes) by 2.5. For example, if your annual household income is $50,000, you might be able to qualify for a $125,000 home. This is just a rough estimate - the actual number will vary based on factors such as your debt and credit history.

Mortgage lenders typically use the housing expense and debt-to-income ratios to more accurately determine how much you can afford to spend on your mortgage.

• Housing Expense Ratio
  Mortgage lenders recommend that your monthly mortgage payment should be less than or equal to a quarter of your monthly gross income. This percentage can change based on the type of mortgage you choose and sometimes the area in which you're looking to buy.
• Debt-to-Income Ratio
  You need to factor your other debts into determining an affordable monthly mortgage payment. Mortgage lenders look at whether your total debt is larger than 30-40% of your monthly gross income. Remember, debt is not just credit cards and student loans. It can also include alimony, child support, car loans, and housing expenses.

A mortgage lender, a housing counselor, or consumer credit counselor can help you better understand these guidelines. Before you talk to a financial professional, you can organize your financial picture by creating a budget. Don't forget that you also have to save for the down payment, closing costs, inspections costs, moving, and other related expenses.

Myths About Homeownership

Lenders evaluate mortgage applications a lot differently today than they did even 10 years ago. And even more has changed in the last 20 years. What used to close the door to homeownership may not be a factor today.

Here are some common homeownership myths:

Myth: You need great credit to become a homeowner.
Fact: You may still be able to buy a home with less-than-perfect credit. And remember, you can improve your credit over time.

Myth: You need to put 20% down to buy a home.
Fact: There are many types of mortgage products and programs that allow low and no down payments. But remember to factor in other costs such as closing costs, property taxes, moving expenses, and repairs.

Myth: You can't buy a home in the U.S. if you're not a citizen.
Fact: If you're a legal resident, you can purchase a home in the U.S.

Myth: If you don't have a bank account or credit cards, you can't qualify for a mortgage.
Fact: Having a bank account is always a good idea and helps you establish credit. However, lenders can approve you for a mortgage even if you don't have a bank account or credit cards. You'll likely need to keep records showing a history of payments you've made for items such as rent, utilities, and car payments.

Myth: Lenders share your personal financial information with other companies.
Fact: By law, banks and other financial institutions are restricted in their uses and disclosures of information about you. In some situations, you may choose to restrict the disclosure of your information if you don't want it to be shared.

Myth: If you're late on your monthly mortgage payments, you'll lose your house.
Fact: If you have a financial hardship, like the death of your spouse or a medical emergency and fall behind, it's possible to keep your home and get back on track if you contact your lender early.

Myth: You can't get a mortgage if you've changed jobs several times in the last few years.
Fact: Not true. You can change jobs several times and still get a loan to buy a home. Lenders understand that people change jobs. The important thing is to show that you've had a stable income.

Boston is the largest city in New England, yet is small compared to other major cities in the U.S. It's steeped in history, yet has its share of modern buildings. In some ways, it's a very provincial city, yet has a long and proud history of international trade and immigration - and has the nation's highest concentration of colleges. We hope you find it as fascinating a place as we do.

Cost of living

If you're moving here from San Francisco, Los Angeles, New York or Washington D.C., chances are you'll see your cost of living go down somewhat.

If you're moving here from anywhere else, however, you'll be shocked at how much more expensive Boston is. See just how much more expensive with Bankrate.com's cost of living calculator. This is almost entirely a factor of our housing prices - always among the highest in the country. So before you move, make sure you're either getting a big enough raise to make up the difference or be willing to settle for smaller living quarters.

Housing

As mentioned above, housing prices can be quite a shocker - both for homes and apartments. However, there is a very wide range of housing sizes and styles. You can find everything from five-story brownstones in the Back Bay to Victorians in Jamaica Plain to triple-deckers in Dorchester and Roslindale (triple deckers are unique to eastern Massachusetts - they are three-story wooden structures, in which typically each floor is its own apartment). Colonials and Capes abound.

Especially in the city and the inner suburbs (see below), you're not likely to find new construction - there just isn't that much room for new houses. That's not necessarily a bad thing, however. Boston is very much a preservationist kind of place, and even at the low end of the market, you will find features (gumwood mouldings, built-in hutches, for example) you just wouldn't see in a house built today.

In general, the farther you are from Boston, the less a house will cost. The Boston Globe's real estate section and Town Online's real-estate database will give you a decent idea of what's available.

Of course, the key question is where to live? Obviously, that depends on a number of factors, including your price range, how urban or rural a community you'd prefer, how important public transportation or highway access is, etc., etc.

In extremely broad terms, here are your choices:

• The Big City
  Yes, you can live in Boston itself. If you have a fair amount of money, and like being in the heart of everything, look at neighborhoods such as the Back Bay and Beacon Hill. If you're looking for something more affordable, or if you want more of a "neighborhood" feel, your options include everything from Charlestown and East Boston to Brighton and the Fenway. Jamaica Plain and the South End are the city's main multi-cultural neighborhoods; both are increasingly victims of their own success - prices are pretty high nowadays. Dorchester is really a collection of neighborhoods that range from urban to almost suburban.

• Inner suburbs
  Boston is physically very small. The inner suburbs (Cambridge, Brookline, Newton and Somerville) offer quick access to the city but with their own unique assets. Newton is the most suburban and expensive, although south Brookline can match it lawn for lawn. Cambridge is Harvard Square but also working class neighborhoods in North Cambridge. Somerville is becoming a sort of Cambridge clone.

• Outer suburbs
  Your basic, classic suburban communities, most with some Ye Olde New Englande touch. They're broadly organized into the North Shore (north of the city), South Shore (south of the city) and MetroWest (the western suburbs).

The state's community profiles include basic overviews of local school systems (for example, teacher/student profiles) and other local data (property tax rates, for example).

Jobs

You can find almost any kind of job around here. However, Boston is particularly strong in three areas: Financial services (think Fidelity), health care (people from around the world come to Boston to get better) and higher education (we have more than 60 colleges and universities in the area). Just outside the city is the "Rte. 128" high-tech belt, which is increasingly a misnomer because these days a lot of the action is actually centered along Rte. 495 (another 12 miles to the west).

What about pay? Traditionally, professionals in the Boston area have accepted lower salaries than their counterparts elsewhere.

Taxes

Sales: There's a 5% state sales tax, but food and clothing (at least for articles up to $150) are exempt. There are no local sales taxes.

Income:

Currently 5.3%. Unearned income is taxed at 12%. You can deduct up to $2,500 of federal social-security taxes each year; renters can deduct up to 50% of their rent (to a maximum of $2,500) each year.

Property: This varies from community to community. Under Proposition 2 1/2 (our answer to California's Prop. 13), communities cannot increase the total amount of revenue from property taxes each year by more than 2.5 percent. However, this does not mean that your individual taxes cannot rise by more than 2.5 percent. Under state law, communities must revalue property every three years. If the local assessors determine that your house has risen in value more than those of other residents', then your tax can go up by far more than 2.5% (because it's the total revenue from all property that's regulated). Of course, this also means that your tax could go down if everybody else's property rises in value more than yours.

But wait, there's more. Prop. 2 1/2 lets towns ask voters to override the limit. The law also lets communities tax different types of properties at different rates; many places tax industrial and commercial properties at higher rates in an attempt to give a break to homeowners. The city of Boston also has a special deduction for people whose primary residence is in the city.

Auto: Each year, you'll get a bill from your community for 2.5% of the assessed value of your car.

Getting around

Boston has an extensive network of subways, bus routes and commuter rail lines. They're great if your goal is to get to downtown in the morning and back home in the evening. The MBTA (or "T" as everybody calls it) has a variety of monthly passes that will let you avoid token booths and save some money. See the MBTA Web site for more details.

The problem comes if you have a reverse commute (i.e., live in the city but work in the suburbs) or even worse, you live in one suburb but work in another. You might have to, gasp, drive to and from work.

The reason for the gasp? Boston drivers are as bad as you've heard- mean, cantankerous and obnoxious (and that's on their good days). Our roads are only slightly better. Many communities don't identify major streets with signs (on the theory, perhaps, that if you don't know what road you're on then you don't belong there), and even when they do, you'll often find the roads changing names seemingly at random. In Boston, for example, one major thoroughfare changes names five times in the span of five miles.

In recent years, the state's answer to highway congestion has been to allow driving in the breakdown lane (a.k.a., highway shoulder) during rush hour. Even after rush hour, should your car break down, don't stay in it if at all possible - unless you want to wind up on the evening news as part of some horrific accident involving somebody doing 90 in the breakdown lane.

Auto insurance: You are required to have a minimum amount. Massachusetts is the only state in the country where insurance rates are set by the state. Where you live determines your exact rates (in general, city dwellers will pay more to insure a given car than suburban residents). Still, in recent years, insurance companies have competed to offer discounts to drivers with good records or who belong to certain groups (AAA, for example).

Getting here by plane or train is pretty easy. All the major airlines fly into Logan, which is incredibly close to downtown (15 minutes by subway or taxi - except maybe at rush hour). There's hourly shuttle service to La Guardia in New York. Amtrak has three Boston-area stops: Rte. 128 in Canton, Back Bay and South Station. There are trains between Boston and New York every two hours or so; the trip currently takes about four hours.

Weather

Boston has four very distinct seasons (although sometimes it seems more like 3 1/2 - winter is followed by about a week of spring and then summer is here).

Beyond that, it's impossible to really characterize Boston weather. It can get to the 70s in January and snow in April. Yes, in general, it's cold in the winter, although we rarely have bitter, prolonged cold snaps, thanks to the Gulf Stream offshore. Summer days can get hot and muggy, but just when things begin to get really unbearable, along comes a thunderstorm to cool things down. Spring can be a glorious time - everybody and everything re-awakens from their long winter slumber (and sometimes, blammo, we get a blizzard). Boston's best associated with the fall, though: crews rowing in the Charles, the foliage, etc.

Culture/Nightlife

You'd be hard pressed to find a U.S. city with more cultural attractions than Boston. From the Boston Symphony Orchestra to the Museum of Fine Arts, from Newbury Street galleries to the bookstores of Harvard Square, Boston has more than enough going on to keep you busy fulltime. Nightlife is equally varied - you can go to a cabaret or do some moshing, take in acoustic folk or an arena act. Important caveat: Bars and clubs can stay open no later than 2 (1 a.m. in some surrounding communities); the public-transit system shuts down at 12:45 a.m.

Recreation

If there's a major league, then Boston has a team in it.

Boston also has all manner of other recreation, from sailing on the Charles, to cross-country skiing to just hanging out at the beach. You can even go downhill skiing right outside the city (at the Great Blue Hill), if you don't mind that the trail isn't that long (but New England's major ski resorts are within a two to three hour drive). The Metropolitan District Commission runs a number of forest preserves, parks, beaches, swimming pools and skating rings; the Audubon Society and the Trustees of Reservations (two private groups) also oversee wildlife preserves.

Many communities have their own recreation leagues; a number have their own town forests.

Department of Conservation and Recreation - Has links to specific state parks and activities.

Mass. Audubon Society

Trustees of Reservations

Local customs

We talk differently than the rest of the country.  (e.g. Wicked means good!)

Blue laws are mainly a thing of the past - long gone are the days when you had to drive to New Hampshire for mall crawling on Sundays and when police would ticket stores that dared to open on the Lord's Day or July 4th. Today, the only remaining Blue Laws pertain to liquor sales: You still can't buy liquor or beer in stores on Sundays or major holidays - unless you happen to be within 10 miles of the New Hampshire state line, where the stores are exempted because of competition from the New Hampshire state liquor stores.

As elsewhere, youth soccer and Little League are big around here. However, you probably won't find many places with as many youth hockey leagues as Boston, at least not south of the Canadian border.

Massachusetts is officially a "commonwealth" rather than a "state" but there's no practical difference beyond the name. Fun fact: Massachusetts is one of the few states without an official governor's mansion (yes, it really is true that Mike Dukakis often took the subway to work). And when a governor leaves office, tradition dictates that he walk through the center doors of the State House (the only time those doors open) and then onto the Boston Common, to symbolize his return to the general citizenry.

There are two main types of communities in Massachusetts: cities and towns. Cities always have a mayor and a city council (or board of aldermen). Larger towns (generally over 30,000 population) are sometimes run by a town council, but more often by an elected Town Meeting (sort of like Congress) and a board of selectmen. Smaller towns also have boards of selectmen but typically also have "open" town meetings. Any registered voters can speak his mind and then vote on the town business. The actual financial importance of Town Meeting has diminished in recent years, due to state mandates and Proposition 2 1/2, but it remains an important political and even social institution.

The more than 250,000 college students who flock to Boston each fall leave their imprint on the city. Virtually all apartment leases in Boston run from Sept. 1 to Aug. 31, for example. Labor Day weekend resembles the Revenge of the U-Hauls in student-heavy areas, such as Allston-Brighton (the part of Boston between Boston University and Boston College).

Boston doesn't have freeways. What we have are highways (one of which, the Massachusetts Turnpike, is a toll road) and parkways (narrow, winding, picturesque roads that were not designed for the amount and speed of traffic they now carry, such as Storrow Drive and the Jamaicaway).

In addition to the usual holidays, Boston has several unique commemorations:

• Patriot's Day
  Best known for the running of the Boston Marathon, this April holiday (the Monday closest to April 19) actually commemorates the battles of Lexington and Concord. If you don't want to watch the race, several towns have Minutemen parades, where people dress up as colonial fighters. Concord has a re-creation of the Battle of Old North Bridge. Darn if the Redcoats don't lose every time.
• Evacuation Day
  Conveniently held on St. Patrick's Day, this commemorates the day the British left Boston. Actually officially celebrated only in Suffolk County (Boston plus three small towns), and there only by city and state workers, who get the day off, causing grief for people trying to, say, renew their license or pay a parking ticket.
• Bunker Hill Day
  Same idea and inconvenience as Evacuation Day, only on June 17.
• Harborfest
  A weeklong series of events culminating on July 4th, with the annual Boston Pops concert/fireworks show on the Charles River Esplanade. Includes Chowderfest - in which you get to stand online under the hot summer sun and eat steaming hot New England clam chowder (based on a cream stock, not tomato juice).
• First Night
  Actually celebrated on the last night of the year, it features scores of indoor and outdoor events. See the First Night site.